SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
IES INDUSTRIES INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[X] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
$453,367
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(2) Form, Schedule or Registration Statement No.:
PRELIMINARY PROXY MATERIALS of WPL HOLDINGS, INC., IES INDUSTRIES INC.
and INTERSTATE POWER COMPANY and JOINT PROXY STATEMENT of WPL HOLDINGS,
INC., IES INDUSTRIES INC. and INTERSTATE POWER COMPANY AND PROSPECTUS
of WPL HOLDINGS, INC. and INTERSTATE POWER COMPANY, ALL ON FORM S-4
FILE NO. 333-07931
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(3) Filing Party:
IES INDUSTRIES INC, WPL HOLDINGS, INC and INTERSTATE POWER COMPANY
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(4) Date Filed:
JANUARY 18, 1996 and JULY 11, 1996
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For Release: August 16, 1996
CONTACT: Diane Ramsey (Media) Denny Vass (Financial)
(319) 398-7288 (319) 398-4475
IES INDUSTRIES BOARD APPROVES REVISED MERGER
AGREEMENT WITH WPL HOLDINGS AND INTERSTATE POWER
--Rejects MidAmerican's Hostile Takeover Proposal;
Calls Unsolicited Bid "Inferior"--
CEDAR RAPIDS, IOWA -- IES Industries Inc. (NYSE:IES) announced today that its
Board of Directors unanimously approved revised terms of a merger agreement with
WPL Holdings, Inc. (NYSE:WPH) of Madison, Wisconsin, and Interstate Power
Company (NYSE:IPW) of Dubuque, Iowa, to form a new regional powerhouse,
Interstate Energy Corporation. Under the terms of the revised agreement, which
was also unanimously approved by the directors present at the Board meetings of
WPLH and IPC, each share of IES common stock will be converted into 1.14 shares
of Interstate Energy common stock. Based on the closing price of WPLH common
stock on August 15, 1996, each share of IES common stock is valued at $36.20 per
share, under the new terms. In addition, based on WPLH's current dividend rate,
it is anticipated that, under the new terms, IES shareholders will receive an
initial annual cash dividend of at least $2.25 for each share of IES common
stock now held.
Under the former agreement, each IES common share was to be
converted into 1.01 shares of Interstate Energy common stock.
Under the revised agreement, each share of IPC common stock
will be exchanged for 1.11 shares of Interstate Energy common stock and owners
of WPL Holdings common stock will retain the same number of shares of common
stock they currently own, and those shares will be converted into Interstate
Energy common stock.
The IES Board also unanimously rejected the hostile takeover
proposal from MidAmerican Energy Company of Des Moines, Iowa, concluding that it
is inferior to the terms of the revised Interstate Energy merger agreement and
is not in the best interests of IES shareholders. The Board also viewed with
concern the impact of the proposed MidAmerican transaction on customers,
employees and the communities IES has served for more than 100 years. In
addition, the Board received an opinion from
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its financial advisor, Morgan Stanley & Company, that the revised exchange ratio
is fair to the shareholders of IES common stock from a financial point of view.
Lee Liu, IES Chairman of the Board, President & Chief
Executive Officer, said: "Under the revised agreement, the Interstate Energy
transaction provides enhanced value to IES shareholders, giving them an even
larger stake in a regional utility with excellent growth potential. By contrast,
analysis of the MidAmerican proposal makes clear that, contrary to their public
statements, the value of the MidAmerican proposal is substantially less than
they represent. The Board's analysis considered, among other things, the recent
trading history of MidAmerican stock; the fact that for most IES shareholders
the exercise of the cash option would entail adverse tax consequences; the fact
that even with the most rapid regulatory approval process for the MidAmerican
transaction -- a scenario we believe unlikely -- the MidAmerican transaction
could take significantly longer to complete than the Interstate Energy
transaction; MidAmerican's ability to sustain its dividend, given its high
payout ratio and the significant additional indebtedness it would incur under
its proposal; and the fact that the MidAmerican transaction contemplates
significant sales of assets to finance the transaction.
"By MidAmerican's own admission, its expected cost savings of
$500 million over ten years are significantly below the $749 million in cost
savings we anticipate over the same period under the Interstate Energy merger.
Given that, and the $400 million in goodwill amortization that would reduce
reported earnings, we must question how MidAmerican could possibly afford the
ambitious promises it is making to customers and shareholders. Clearly, the
financial burden stemming from the acquisition premium and the goodwill
amortization will have to be borne by ratepaying customers and shareholders.
"Finally, given the greater overlap of service territories
between MidAmerican and IES, a MidAmerican takeover of IES would result in the
loss of more Iowa jobs and, in our view, significant economic hardship for Cedar
Rapids. In the case of Interstate Energy, it will have 60% of its assets and a
commensurate number of its total employees in Iowa. We believe these issues will
not go unnoticed by Iowa regulators and public officials."
Mr. Liu noted that IES shareholders will own a significant
share -- more than 44% -- of a powerful regional company -- well-positioned to
provide customers with competitively-priced electricity and to do it in a way
that will enable the new company to generate enhanced value to IES' shareholders
over the long term, as well. "The ability to market electricity from our
efficient, low-cost power plants to attractive, higher-growth areas in
neighboring states and the financial resources to pursue these opportunities,
will catapult
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Interstate Energy into new markets. Altogether, the Interstate Energy
combination offers strategic advantages far superior to the MidAmerican
alternative," he said.
"Under the Interstate Energy combination, there will be four
major business units in three locations. Both the Energy Delivery headquarters
and the unregulated business unit will be in Cedar Rapids. The Administrative
Support business will be in Dubuque. This will significantly increase the
business activities in the Iowa cities. The Generation business unit will be in
Madison. The Interstate Energy holding company will be in Madison," Liu
concluded.
IES further said that supplemental proxy material will be sent
to its shareholders promptly so that they can vote on the new merger plan at the
Annual Meeting, which remains scheduled for Thursday, September 5, starting at
10:00 a.m. in Cedar Rapids.
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WPL HOLDINGS, INC. COMPANY NEWS
FYI: THE FOLLOWING NEWS RELEASE IS BEING DISTRIBUTED THIS MORNING TO STATE,
REGIONAL AND NATIONAL FINANCIAL AND BUSINESS MEDIA. SHOULD YOU HAVE QUESTIONS
REGARDING THIS ANNOUNCEMENT, PLEASE CALL BOB RUSCH, ASSISTANT TREASURER, AT
WISCONSIN POWER AND LIGHT AT (608) 252-3470
For more information, contact
WPL Holdings: Pat McMahan @ (608) 252-3186
WPL HOLDINGS, IES INDUSTRIES AND INTERSTATE POWER CO.
ANNOUNCE NEW EXCHANGE RATIO FOR IES COMMON STOCK
MADISON, WISCONSIN, AUGUST 16, 1996 -- WPL Holdings, Inc. (NYSE:WPH), IES
Industries Inc. (NYSE:IES) and Interstate Power Co. (NYSE:IPW) today announced
that they have agreed on a new exchange ratio for IES, given the strategic value
of their unprecedented three-way merger to customers, shareowners and employees.
If approved, the three utility companies would combine as Interstate Energy
Corp.
The agreement on a new exchange ratio for IES, which all three
boards of directors are recommending that shareowners approve, was announced
following a decision by the IES Board of Directors to reject a recent
unsolicited offer for IES by MidAmerican Energy Co.
Under terms of the agreement, holders of IES Industries common
stock will receive 1.14 shares of Interstate Energy Corp. common stock for each
share of IES stock they own. Under the previous terms of the merger agreement,
holders of IES common stock would have received 1.01 shares of Interstate Energy
Corp. common stock for each share of IES stock.
Holders of Interstate Power common stock will continue to
receive 1.11 shares of Interstate Energy Corp. common stock for each share of
Interstate Power stock they own. WPL shares, meanwhile, will remain outstanding
as an identical number of shares in Interstate Energy Corp.
Erroll B. Davis Jr., president and CEO of WPL Holdings, said
all three Interstate Energy partners believe the strategic value of the
three-way combination justifies the new exchange ratio.
"Unequivocally, the strategic value of our three-way merger
for our customers, shareowners and employees is even stronger today than it was
when we announced the merger agreement nine months ago," he said. "The new
exchange ratio reflects a commitment to the strategic value of this
unprecedented three-way alliance."
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According to Davis, the continuing proliferation of merger
agreements in the electric-utility industry only confirms the inevitability of a
more competitive energy marketplace.
"Utility companies are not looking for strategic partners
merely to get bigger," Davis said. "Strategic alliances such as ours are merely
a means, not an end, toward developing and marketing the array of energy
products and services customers will demand once competition is injected into
the electric- utility industry."
Davis also cited the benefits to customers and shareowners
that are projected to accrue from approximately $749 million in operational
savings over 10 years as a result of the three-way merger. Most of the savings
will be achieved through greater economies of scale and the elimination of
duplicated functions.
"As a more cost-effective business, Interstate Energy Corp.
will enable us to maintain low energy rates and high-quality customer service
for more than 1 million energy customers in a four-state region," Davis said.
The annual meetings of shareowners of WPL Holdings, IES and
Interstate Power remain scheduled for Thursday, Sept. 6, beginning at 10 a.m.,
with the WPL Holdings annual meeting to take place at the Dane County Exposition
Center in Madison. In the very near future, WPL Holdings shareowners will
receive supplemental proxy materials describing the new stock exchange ratio.
WPL Holdings, IES Industries and Interstate Power announced
the three-way merger agreement on Nov. 11, 1995. If the merger is approved by
shareowners and regulatory authorities, Interstate Energy Corp. would serve
approximately 870,000 electric and 360,000 natural gas customers in Wisconsin,
Iowa, Minnesota and Illinois.
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INTERSTATE POWER COMPANY NEWS
CONTACT: Terry Harrmann
(319) 557-2215
INTERSTATE POWER COMPANY, IES INDUSTRIES AND WPL HOLDINGS ANNOUNCE NEW EXCHANGE
RATIO FOR IES COMMON STOCK
DUBUQUE, IOWA, AUGUST 16,1996 -- Interstate Power Company (NYSE:IPW), IES
Industries Inc. (NYSE:IES) and WPL Holdings, Inc. (NYSE:WPH), today announced
that they have agreed on a new exchange ratio for IES, given the strategic value
of their unprecedented three-way merger to customers, shareholders and
employees. If approved, the three utility companies would combine as Interstate
Energy Corp.
All three Boards of Directors, by unanimous vote of the
directors present at the meetings, are recommending that the shareholders
approve the agreement on the new exchange ratio for IES. This was announced
following a decision by the IES Board of Directors to reject a recent
unsolicited offer for IES by MidAmerican Energy Co.
Under the terms of the agreement, holders of IES Industries
common stock will receive 1.14 shares of Interstate Energy Corp. common stock
for each share of IES stock they own. Under the previous terms of the merger
agreement, holders of IES common stock would have received 1.01 shares of
Interstate Energy Corp. common stock for each share of IES stock. Holders of
Interstate Power common stock will continue to receive 1.11 shares of Interstate
Energy Corp. common stock for each share of Interstate Power stock they own. WPL
shares, meanwhile, will remain outstanding as an identical number of shares in
Interstate Energy Corp.
Wayne H. Stoppelmoor, president and CEO of Interstate Power
Company, said, "Because of the unique strategic value of this three-way
combination, the directors of Interstate Power Company unanimously supported the
new exchange ratio."
Stoppelmoor explained, "This strategic three-way combination
will ensure our position in a competitive regional market. It will offer our
customers the opportunity for better service and continued low rates. For our
shareholders it offers growth and increased value."
"Growth opportunities for employees and our communities make
this strategic regional merger highly desirable. The electric utility world is
changing around us and with this unique alliance, we are prepared for the
competitive era," Stoppelmoor concluded.
The annual meeting of stockholders for Interstate Power
Company, WPL Holdings, Inc. and IES Industries remains scheduled
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for Thursday, September 5, 1996 beginning at 10:00 a.m. Interstate Power's
meeting will take place at the Holiday Inn Dubuque Five Flags in Dubuque.
In the very near future, Interstate Power Company stockholders
will receive supplemental proxy materials describing the new stock exchange
ratio.
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